The statutory remedy for unfair prejudice in South African company law

Abstract

The convergence of world economies as a result of globalisation calls for jurisprudential review relating to shareholder rights in various jurisdictions. Most countries, including South Africa, base the protection of minority shareholders on common law as well as “home-grown” legislation. Among its shareholder remedies, South African law provides the statutory remedy for unfair prejudice, also known as the “oppression remedy”. The remedy enables shareholders to seek judicial intervention when their corporate interests are jeopardized often by their majority counterparts. In the past, dissatisfied minority shareholders have utilised this remedy. This article considers whether the development of the remedy from its initial introduction in South African company law has been beneficial to shareholders. The author traces the history of the remedy to the Companies Act 46 of 1926 and its subsequent amendment in the Companies Act 61 of 1973 and Companies Act 71 of 2008, respectively. Recommendations on how the remedy can be further improved from its current form are also made.